Ohio’s Economic Recovery: John Kasich Didn’t Build That!

Ohio Governor John Kasich took a victory lap at the Republican National Convention this week, detailing just how great Ohio is doing economically and fiscally. It was, of course, complete hogwash. Not the economic recovery part, but that Kasich deserves credit for it.

The Democrat [sic] argument that Ohio’s recovery began on their watch is ludicrous; it simply mirrored the national recovery.

And to prove their point that Ohio’s unemployment rate merely mirrored the national recovery, they cited a graph created by ODP (which accurately reflects the U.S. Department Labor’s data:)

Don’t believe me? Take a look at this graph that Democrats have used to try and make their point:

There’s a crack in your mirror, TBP…

What the chart actually shows is that Ohio’s unemployment rate went from being above the national rate to being below the national rate months before Kasich took office. Not exactly “mirroring”.

Ohio was on pace with the rest of the country until the Governor’s budget went into effect at which time the drop in our unemployment rate began to outpace the national rate.

Um, no, again. What the chart (and the data underlying it shows) is that Ohio’s unemployment rate went UP as the legislature enacted Kasich’s budget. It went up in June when it was enacted, and stayed up in July when it became law. Even worse, if you look at the fifteen months where Ohio’s unemployment rate started to drop off its recession high in January 2010 and the fifteen months after (all while Kasich’s been in office), Ohio’s drop in its unemployment rate has slowed down. Ohio saw a fourteen-month trend in month after month consistently dropping unemployment starting in 2010. A feat we haven’t seen since the recovery in 1983 under Democratic Governor Dick Celeste. Under Kasich’s budget, Ohio has not come close to repeating what we saw during the last Strickland budget. Those are the facts, and they cannot be disputed.

Do you know what have been the two greatest months of job creation in Ohio since Kasich’s been office have been? The two months after Ohio voters overwhelming rejected SB 5 by defeating Issue 2. Since Indiana became enacted right-to-work legislation in Ohio, it’s gained only 27,900 new jobs, according to the U.S. Department of Labor’s Bureau of Labor Statistics (seasonally adjusted CES Survey.) In comparison, Ohio’s gained 67,800 new jobs in the same time period. For years, conservatives such as those at the Buckeye Institute and Americans for Prosperity have said that to compete with the South, Ohio needed to move to becoming a right-to-work State. Guess what? Ohio is either tied or has better unemployment rate than 14 of the 23 States that are right-to-work. In fact, the highest unemployment rates in the nation right now are predominantly in those right-to-work States.

Yes, it’s true that Ohio’s under an economic recovery. Kasich’s telling the truth there. But what he neglects to mention is two simply things: 1) by any measure, it began nearly a year before he took office and has since weakened since he took office, and 2) Kasich has little reason to claim responsibility for it continuing. The U.S. DOL’s CES survey (you know, the survey of employers, I mean, “job creators”) shows more people in Ohio became employed in Gov. Ted Strickland’s last year in office than in Kasich’s first.

The State’s GDP still grew in Kasich’s first year, but by less than half of what it did the year prior. And what was so different in Ohio’s economy in 2010 than in 2011? The President’s stimulus was still in effect in 2010. That’s how Ohio’s economy went from shrinking 6.2% GDP in 2009 during the recession to growing 2.7% the next year. Kasich took over, the stimulus ended, and Ohio’s economy only grew 1.1% GDP in 2011.

Ohio went from bleeding jobs in the durable goods manufacturing sector (read- auto jobs) in 2009 during the recession to regaining over 50k of those jobs back.

Again, Kasich can’t take credit for a trend that began well over a year before he took office. But President Obama and U.S. Senator Sherrod Brown can because there is no doubt that the trendline’s sudden reversal in this sector is due to the auto bailout, especially when you consider that this is the first time in nearly twenty years Ohio’s seen such consistent positive growth in this sector of the labor market.

In a recent Dispatch editorial, the Kasich Administration has claimed that the auto recovery cannot account for Ohio’s recovery because federal labor statistics shows there are 3,200 less vehicle and parts manufacturing jobs in Ohio since January 2011. Actually, that’s not what the data shows. The actual data shows that it’s dropped only 1,400 jobs (the Kasich Administration exaggerated the loss by more than doubling it.) And a January to July comparison isn’t fair because there’s almost always a loss of such jobs in July when the industry has temporary layoffs as the auto factories retool for the next year’s model production lines. But as the AP reported, the loss this July were less than usual:

Most auto companies close their factories in July to retool their factories for new models. But with auto sales strong, some companies skipped the shutdowns, resulting in fewer layoffs.

In other words, Kasich’s explanation that the auto industry is not doing well in Ohio is just full of crap, andthe Dispatch‘s editorial page should be ashamed for falling for it so easily.

But what has Kasich really done since being Governor that deserves credit for the economy? Not much. On taxes, Kasich ran on a platform to repeal Ohio’s income tax but he’s only offered (and been unable to deliver) a modest income tax cut that would amount to less than $50 a year for Ohio’s middle class families. Yes, they’ve repealed the estate tax, but that has yet to go into effect.

Just like right-to-work States, Ohio’s doing as well or better on its unemployment rate than most of the States that don’t have an income tax. Kasich is still just wrong that Ohio’s income tax is a barrier to Ohio creating jobs to compete with other States.

Wrong. We had a nearly billion budget surplus and a state constitutional amendment mandating a balanced budget. We didn’t claim that Kasich inherited a nearly billion budget surplus from Ted Strickland. Kasich’s own Office of Budget and Management did.

And there’s the simply problem of “math.” As I said earlier, taxes have stayed essentially the same at the state level. And Kasich’s budget shows over a $5 billion increase in general revenue fund spending. All funds (including passthrough funds from the federal government) spending only went down a little over $2 billion. There’s no way that you can look at Kasich’s budget and credibly argue that there’s an $8 billion deficit that a) existed before the budget and b) the budget “fixes.” Kasich’s budget also has plenty of “one time” money in it from deferred payments on the State’s debts, to privatization of the state’s prisons, selling of the state parks for fracking, to securitizing the state’s liquor profits for JobsOhio.

Kasich then claimed that they enacted “common sense” regulations that stopped smothering businesses.

Wrong again. Don’t take our word for it. Here’s the recent semi-annual report from Lt. Governor Mary Taylor, the head of the Administration’s “Common Sense Initiative” regulatory reform office. In it, Taylor says that her office has only reviewed 18 of the 52 rule packages submitted to it. Of those, only one resulted in CSI recommending against the package. Taylor concedes that her office, instead of making the State move at the “speed of business,” is a bureacratic process that is slow to review proposed regulations and issue its legally required recommendations.

Trying to put the best spin on CSI, Taylor states:

249 rules that impacted business were either rescinded or amended through the CSI review process through the first six months of 2012.

Now, there’s a huge difference between whether a rule was totally rescinded or just amended, and it’s interesting that Taylor provides no breakdown. In comparison, Governor Strickland in 2008 issued an Executive Order requiring a review of Ohio’s regulatory environment that resulted in 2,050 rules being either eliminated or revised. CSI has reviewed, let alone revised, a fraction of the regulations the Strickland Administration was able to do in the same amount of time. CSI is just a less successful rebranding of what Strickland already did.

And Kasich’s JobsOhio is such a constitutional mess that the Administration has resorted to suing itself in the nearly all-GOP Supreme Court in the hopes of untangling its’ constitutional mess.

“We went from 89 cents in our rainy day fund to $500 million dollars in surplus.”

Technically true, except that most of the money that Kasich put in the rainy day fund… came from the Strickland surplus. The money that came from Kasich’s budget for the rainy day fund largely came from his Administration dropping its Medicaid caseload, which it admits is by not providing coverage to all Ohioans who are entitled to Medicaid. So most of the money comes from a surplus Kasich won’t admit existed. The part Kasich’s contributed came from not delivering Medicaid benefits to Ohioans who are entitled to it. Huzzah!

What Kasich omitted.

Kasich’s speech to the RNC left out three of the most important priorities for Kasich and the GOP legislature since they took office in 2011: 1) the rolling back of workers’ rights (SB 5); 2) the rolling back of voters’ rights (HB 194); and 3) the rollback of Ohio women’s reproductive rights (too many to list). An odd omission since all three are proven crowd pleasures with the RNC crowd and all are prominently included in the Republican Party Platform. This legislature and Kasich have spent more time, political capital, and energy on these three things, especially on abortion, than they have on anything related to jobs.

Yes, Governor Kasich, Ohio’s economy is in a recovery. But no, you didn’t build that.